Rio Tinto and H2 Green Steel partner to accelerate green steel transition

Rio Tinto (ASX:RIO) and H2 Green Steel have signed a multi-year agreement for the supply of iron ore pellets from Rio’s Iron Ore Company of Canada (IOC) operations.  

Rio will also purchase and on-sell a part of the surplus low carbon hot briquetted iron (HBI) produced by H2 Green Steel during the ramp-up of its steelmaking capacity.

The reduction pellets will account for a significant part of the iron ore supply to H2 Green Steel’s flagship plant in Boden, Sweden, which will be one of the world’s first large-scale producers of low carbon iron and steel.

The plant is expected to start operations in 2025, processing direct reduction pellets into HBI and then making steel through electric arc furnaces using green hydrogen.

Boden will hold one of the world’s largest electrolysis plants for green hydrogen production.

H2 Green Steel chief executive Henrik Henriksson said this is a significant milestone for the company.

“This is a significant milestone for our project in Boden,” he said.

“Not only by securing a supply of the high-quality iron ore needed for our green steel production, but also because we have a buyer for a portion of the HBI we initially expect to produce.

“Rio Tinto is a global leader in the mining industry and we welcome its concrete actions to accelerate the decarbonisation of the steel industry.”

Steel production currently contributes around 8% of global carbon emissions. By using green hydrogen instead of coal, carbon dioxide emissions can be reduced by up to 95%.

Rio Tinto head of steel decarbonisation Simon Farry commented on the agreement.

“We are partnering across the steel ecosystem to find better ways to support the decarbonisation of iron and steel making, and to reduce our scope three emissions,” he said.

“Our supply of high-grade iron ore pellets will support the acceleration of H2 Green Steel’s project, and on-selling their low-carbon HBI will enable us to gain a deeper understanding of the future needs of our customers and end users in the emerging green iron and steel market.”